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3 Big Things Today, February 19, 2021

Soybeans Slightly Higher Overnight; Ethanol Production Falls to Five-Month Low.

1. Soybeans Modestly Higher in Overnight Trading

Soybeans were slightly higher while grains were little changed in overnight trading on a mixed outlook from the U.S. Department of Agriculture.

Crop prices are being supported by “solid domestic demand” and strong exports while the livestock outlook remains positive due to the same factors, the USDA said at its annual outlook forum yesterday.

Agriculture exports this year are expected to jump to a record $157 billion, the agency said. Shipments to China are forecast to increase to an all-time high of $31.5 billion.

“Trade, particularly to China, (will be) a key element for 2021,” the agency said. “Weather will have the last say on supplies.”

Still, uncertainties remain.

The government said farm incomes are expected to decrease in 2021. Also expected to fall are total government payouts that surged last year due to the COVID-19 pandemic.

Disposable income is “less certain” and supply chain disruptions have moderated but at a cost. Dairy demand is expected to be solid, but stockpiles are plentiful, the USDA said at the forum.

Soybean futures for March delivery up 2¼¢ to $13.78¾ a bushel overnight on the Chicago Board of Trade. Soymeal was up 70¢ to $425.40 a short ton, and soy oil added 0.33¢ to 46.58¢ a pound.

Corn for March delivery fell ½¢ to $5.48½ a bushel.  

Wheat futures for March delivery rose ½¢ to $6.65¾ a bushel, while Kansas City futures gained ¾¢ to $6.43¾ a bushel.

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2. Ethanol Production Drops to Lowest in Almost Five Months

Ethanol output plunged to the lowest level in almost five months in the week that ended on Feb. 12 while stockpiles grew, according to the Energy Information Administration.

Production of the biofuel dropped to an average of 911,000 barrels a day, the EIA said in a report.

That’s down from 937,000 barrels, on average, the previous week and the lowest level since the week that ended on Sept. 25.

In the Midwest, by far the biggest producing region, output dropped to an average of 868,000 barrels a day.

That’s down from 895,000 the previous week and also the lowest output since late September, the government said.

That composed the entirety of the decline as all other regions were unchanged.

East Coast and Gulf Coast output stayed at an average of 12,000 barrels a day, and Rocky Mountain and West Coast production were unchanged at 9,000 barrels a day, on average, the EIA said in its report.

Stockpiles, meanwhile, increased to 24.297 million barrels in the seven days that ended on Feb. 12, the agency said.

In other ethanol news, the U.S. Environmental Protection Agency said in a report Thursday that all 16 petitions from small refineries that would exempt them from meeting blending obligations under the Renewable Fuels Standard from 2020 are still pending.

Including all years, 66 petitions are still pending dating back to 2011 including 30 petitions that were filed in 2019 and three that were issued in 2018, the EPA said in its report.


3. Hard-Freeze Warning Issued in Already Hard-Hit Central, East Texas

Wind-chill warnings and blizzard warnings have ended, but it’s still cold in some parts of the U.S.

In much of central and eastern Texas where power and water are still out after several days of winter weather, a hard-freeze warning has been issued, according to the National Weather Service.

Temperatures are expected to drop into the teens overnight across the region with some isolated pockets in the single digits, the NWS said in a report early this morning.

The hard-freeze warning is set to end at 9 a.m. local time.

“Power outages continue across portions of the region, leaving some without means of heating their home and increasing the risk of frozen indoor plumbing,” the agency said. “Any ice that melted on roads today will re-freeze, leading to dangerous travel conditions tonight.”

In southern Missouri and Illinois, wind chills are expected to hit -5°F. to -10°F. early this morning while wind chills from 5°F. to 10°F. are forecast into Saturday morning, the NWS said.

Another storm system will rumble through the area starting Sunday, which is expected to bring a mixture of rain and snow, the agency said.

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